Section 13 in MCOB 5 Annex 1 is required only where the illustration is provided to the customer by, or on behalf of, a mortgage intermediary. If this is not the case, Section 14 must be renumbered Section 13.

(1) Further requirements regarding the use of the Key facts logo and the location of specimens are set out in GEN 5.1 and GEN 5 Annex 1 G.33(2) MCOB 5.6.2 R(3) does not prevent the use of different fonts and typefaces for headings and risk warnings. Its purpose is to prevent particular sections of the illustration from being made less prominent than other sections through the inconsistent use of font sizes and typefaces.(3) The illustration can contain the mortgage lender's or

The illustration provided to customers must:(1) contain only the material prescribed in MCOB 5.6 and no other material except where provided for elsewhere in MCOB 5.6; and(2) be in a document separate from any other material that is provided to the customer.

Where the illustration relates to a regulated mortgage contract that is sub-divided into different parts with different types of interest rate or different rates of interest or different conditions, or a combination of these, the requirements in MCOB 5.6 may be adapted to accommodate this. The adaptations made must be limited to those that are necessary.

(1) MCOB 5.6.13 R applies where, for example, the illustration covers a regulated mortgage contract that is:(a) divided so that a certain amount of the loan is payable on a fixed interest rate, and a certain amount on a discounted interest rate; or(b) a combination of a repayment mortgage and an interest-only mortgage and the loan is subdivided into different types of interest rate and/or different rates of interest.(2) MCOB 5.6.13 R does not apply where an illustration covers

At the head of the illustration, the following information must be included:(1) the customer's name;(2) the date of issue of the illustration;(3) details of how long the illustration is valid and whether there is any date by which the regulated mortgage contract covered by the illustration needs to commence (for example, where a fixed interest rate is only available if the regulated mortgage contract commences before a certain date); and(4) the prescribed text at the head of the

(1) Unless (2) applies, under the section heading 'Which service are we providing you with?' the prescribed text in MCOB 5 Annex 1 under this heading must be included, with a 'check box' for each statement, one of which must be marked prominently to indicate the level of service provided to the customer.(2) If the level of service described in the illustration is provided by another firm, (1) may be replaced by the following:Under the section heading 'Which service are we providing

(1) Under the section heading 'What you have told us', the illustration must state the information that has been obtained from the customer under MCOB 5.6.6 R (apart from MCOB 5.6.6 R(1) which is provided for in Section 4 of the illustration), and can include brief details of any other information that has been obtained from the customer and used to produce the illustration.(2) If the amount on which the illustration is based includes the amount that the customer wants to borrow

Where the same illustration covers a regulated mortgage contract that is a combination of a repayment mortgage and an interest-only mortgage, either:(1) Section 3 of the illustration must state the amount the customer wishes to borrow as a repayment mortgage and the amount required as an interest-only mortgage; or(2) Section 3 of the illustration must summarise the repayment method as partly an interest-only mortgage and partly a repayment mortgage, and Section 4 of the illustration

Where the same illustration covers a regulated mortgage contract that has different parts of the loan over a different term (that is, the final repayment date of the loan parts are different), either:(1) Section 3 of the illustration must state the amount repayable over each term; or(2) Section 3 of the illustration must state the longest term that applies and Section 4 of the illustration must state the amount repayable over each term.

For the purpose of illustrating to the customer the repayment method in Section 3 or Section 4 of the illustration, or the cost of the regulated mortgage contract in Section 5 of the illustration, if the illustration covers a regulated mortgage contract that is a combination of more than one interest-only part on the same product terms but with different repayment dates, the illustration must either treat it as one part by assuming the longest term, or alternatively treat it as

At the end of Section 3 of the illustration a statement must be included making clear that changes to any of the information obtained from the customer, and where appropriate to the valuation of the property, could alter the details elsewhere in the illustration, and encouraging the customer to ask for a revised illustration in this event.

An example of the type of statement that would satisfy MCOB 5.6.22 R is:'The valuation that will be carried out on the property and changes to any of the information you have given us could alter the information in this illustration. If this is the case please ask for a revised illustration.'

Description of interest rate types and rates of interest. This table belongs to MCOB 5.6.26R:Description of the interest rateAmount payable in each instalmentLender's base mortgage rate - must be described as the [Lender]'s standard variable rate, currently X%, [where applicable insert the date at which the interest rate ends or period for which the interest rate applies].Amount based on X%.Fixed rate - must be described as a fixed rate of X% [where applicable insert the date

Where the loan under the regulated mortgage contract is divided into more than one part (for example where part of the loan is a fixed interest rate and part of the loan is a discounted variable interest rate) and the firm displays this in a tabular format in the illustration:(1) the following text must be used to introduce the table 'As this mortgage is made up of more than one part, these parts are summarised below:';(2) each part must be numbered for ease of reference in the

An example of further information that may be included in accordance with MCOB 5.6.29 R might be that an 'approval in principle' has been granted subject to valuation and satisfactory credit reference.

Under the section heading 'Overall cost of this mortgage' where the regulated mortgage contract has an agreed term for repayment and a regular payment plan (that is, it is not a revolving credit agreement such as a secured overdraft or mortgage credit card, or a regulated mortgage contract where all of the interest rolls up, such as an open-ended bridging loan):(1) the following text must be included in the illustration: 'The overall cost takes into account the payments in Sections

Under the section heading 'Overall cost of this mortgage' where the regulated mortgage contract has no agreed term for repayment, (and a 12 month term has been assumed), or no regular payment plan, or both (for example, a revolving credit agreement such as a secured overdraft or mortgage credit card or a regulated mortgage contract where all the interest rolls up such as an open-ended bridging loan):(1) the following text must be included in the illustration: 'The overall cost

MCOB 5.6.31 R(5) and MCOB 5.6.32 R(5) would require, for example, a reference to the fact that the overall cost takes into account mortgage payment protection insurance where this is required as a condition of the regulated mortgage contract to which the illustration relates. The requirement to take out such insurance must be stated in Sections 4 and 9 of the illustration in accordance with MCOB 5.6.25 R(6), MCOB 5.6.74 R or MCOB 5.6.77 R.

The following text must be included after the text required by MCOB 5.6.31 R or MCOB 5.6.32 R with the relevant cost measures shown in the right-hand column of Section 5 in accordance with the layout shown in MCOB 5 Annex 1:(1) 'The total amount you must pay back, including the amount borrowed is £[insert total amount payable]';(2) 'This means you pay back £[insert the total amount payable] divided by the amount on which the illustration is based from MCOB 5.6.6 R(2) plus all

(1) The APR and the total amount payable in MCOB 5.6.34 R must be calculated on the basis of information obtained from the customer under MCOB 5.6.6 R.(2) Where there is a charge to be included in the APR and total amount payable and the precise amount of that charge is not known at the time that the illustration is provided, MCOB 10.3 (Formula for calculating the APR) sets out a number of relevant assumptions to be used. If the method for including the charge is not addressed

At the end of Section 5 of the illustration the following text must be included:(1) unless the interest rate is fixed throughout the term of the regulated mortgage contract:'The figures in this section will vary following interest rate changes and if you do not keep the mortgage for [insert term from MCOB 5.6.6 R(4)].'; and(2) (a) where the regulated mortgage contract is a repayment mortgage:'Only use the figures in this section to compare the cost with another repayment mortgage.';

The purpose of the illustration is to provide the customer with details of the cost of borrowing the amount required over the term specified from MCOB 5.6.6 R(2) and MCOB 5.6.6 R(4). Section 12 has been designed specifically to allow examples of the effect of any additional features of the regulated mortgage contract such as a linked current account or a linked savings account. Examples of these features should therefore be shown in Section 12 and not in Section 5 or Section 6

The heading for Section 6 of the illustration and the heading of the column on the right-hand side of this section must state the frequency with which payments must be made by the customer. (For example, if payments are to be made on a monthly basis, the heading for this section must be 'What you will need to pay each month' and the column must be headed 'Monthly payments'.)

All the payments in Section 6 of the illustration must be calculated based on the frequency used for the purposes of the headings in MCOB 5.6.40 R and must be shown in the column on the right-hand side of this section.

Section 6 of the illustration must contain the following information: (1) the loan amount on which the illustration is based. This figure should include all fees, charges and insurance premiums that have been added to the loan in accordance with MCOB 5.6.18 R(2) and MCOB 5.6.18 R(3), and the following text must follow the loan amount:'and include[s] the [fees] [and] [insurance premiums] that are shown in [Section 8] [and] [Section 9] as being added to your mortgage.'(2) the assumed

Where the illustration covers a regulated mortgage contract that automatically converts from one repayment method to another after a specified period, then the illustration must show the effect of this change on the regular payment, in the same way as the requirements in MCOB 5.6.42 R(3).

Where the illustration covers a regulated mortgage contract that is a combination of a repayment mortgage and an interest-only mortgage, the payment amounts in MCOB 5.6.42 R(3)(d) must be the combination of the amount to be paid on the repayment mortgage and the amount to be paid on the interest-only mortgage, unless MCOB 5.6.13 R or MCOB 5.6.54 R apply in which case they must be stated separately.

Where the interest is deferred on the regulated mortgage contract, the following text must be included under the information on the deferred interest rate included in the illustration in accordance with MCOB 5.6.42 R(3):'"The interest deferred will be added to your mortgage. The table at Section [insert 6a or 6b if MCOB 5.6.55 R applies] of this illustration shows how this will affect the amount you owe.'

Where MCOB 5.6.55 R applies and part of the regulated mortgage contract is an interest-only mortgage:(1) if a quotation for the repayment vehicle has been included in the illustration in accordance with MCOB 5.6.52 R(3) then MCOB 5.6.52 R(5) does not apply.(2) a statement is required to indicate that these payments do not include the cost of any savings plan.

Under the section heading 'Are you comfortable with the risks?':(1) under the sub-heading 'What if interest rates go up?' the illustration must include the following:(a) if the interest rate is fixed throughout the term of the regulated mortgage contract, an explanation that the payments will not vary because the interest rate is fixed;(b) if the interest rate is fixed for part of the term of the regulated mortgage contract, an explanation of when or how increases in the interest

The amount by which the customer's payments would increase in accordance with MCOB 5.6.59 R(1)(g) and (h) must be calculated as follows:(1) the firm must use the total amount borrowed, or assume that all payments due on the regulated mortgage contract have actually been paid, all additional fees and payments due have been paid, and no underpayments or overpayments have been made;(2) where all or part of the regulated mortgage contract is a repayment mortgage, the calculation must

Under the section heading 'What fees must you pay?' the illustration must:(1) itemise all the fees that are included in the calculation of the APR in accordance with MCOB 10 (Annual Percentage Rate), excluding any charges for insurance set out in Section 9 in accordance with MCOB 5.6.73 R; and1(2) include a statement at the end of the section using the following text:'You may have to pay other taxes or costs in addition to any fees shown here.'

An example of a fee that would normally be included in Section 8 would be a fee to re-inspect a property after completion of works if it is known that this fee will be charged at the time the illustration is produced. An example of a fee that would not be included would be a fee payable by the customer to insure their property elsewhere (however this would need to be stated in Section 9 of the illustration 'Insurance', as required by MCOB 5.6.77 R(2)). Fees payable upon repayment

The following information must be provided for each fee included in this section of the illustration in accordance with MCOB 5.6.66 R(1):(1) a description of the fee;(2) the amount payable by the customer recorded in a column headed 'Fee amount' on the right-hand side of this section;(3) for fees included under the sub-heading 'Other fees', to whom the fee is payable;(4) when the fee is payable;(5) whether or not the fee is refundable, and if so, the extent to which it is refundable;

(1) If a higher lending charge is payable by the customer, the following text must be used to describe such a charge for the purposes of MCOB 5.6.69 R:'A higher lending charge is payable because you are borrowing [insert the ratio of the mortgage amount (from MCOB 5.6.6 R(2)) to the property's price or value (from MCOB 5.6.6 R(3))] of the property's [estimated] [price/value].'(2) If the customer has asked for any fees to be added to the loan, this must be stated alongside each

'Other fees' will include any fee charged by a mortgage intermediary, or another third party, for advising on or arranging a regulated mortgage contract but not commission or procuration fees (which are dealt with in Section 13 of the illustration).

(1) Under the section heading 'Insurance' the illustration must include details of:(a) insurance which is a tied product; and(b) insurance which is required as a condition of the regulated mortgage contract which is not a tied product.(2) A firm may also provide details of insurance which it is optional for the customer to take out under this section heading.(3) It must be clear to the customer which products he is required to purchase under which circumstances (for example, where

The following information must be included under the sub-heading 'Insurance you must take out as a condition of this mortgage but that you do not have to take out through [insert the name of the mortgage lender, or where relevant the name of the mortgage intermediary, or both]':(1) if the regulated mortgage contract requires the customer to take out an insurance policy (other than that which is a tied product which the customer is obliged to purchase through the mortgage lender,

Under the sub-heading 'Insurance you must take out as a condition of this mortgage but that you do not have to take out through [insert name of mortgage lender or where relevant the name of the mortgage intermediary, or both]' the illustration should not include any insurance policy that may be taken out by a mortgage lender itself to protect its own interests rather than the customer's interests, for example, because of the ratio of the loan amount to the property value.1

If the cost of any insurance that the mortgage lender might take out to protect its own interests, because of the ratio of the loan amount to the property value, is passed on to the customer, it will be shown elsewhere in the illustration, for example, as a higher lending charge or in the interest rate charged.

A firm may include in the illustration, under the sub-heading 'Optional insurance', quotations (estimated where necessary) for any insurance products (other than the insurance products covered elsewhere in the illustration in accordance with MCOB 5.6.74 R and MCOB 5.6.77 R) that the firm issuing the illustration wishes to promote to the customer.

(1) If any quotations for insurance are included in the illustration in accordance with MCOB 5.6.74 R(3), MCOB 5.6.77 R(1) or MCOB 5.6.80 R, the illustration:(a) must include a brief description only of the type of insurance (full details of the insurance cover may however be provided separately); and(b) (i) must include the total price to be paid by the customer in a column on the right hand side of the illustration under the heading '[insert frequency of payments quoted] payments';

Under the heading 'What happens if you do not want this mortgage any more?', the illustration must include the following information on the regulated mortgage contract:(1) under the sub-heading 'Early repayment charges':(a) an explanation that the customer cannot repay the regulated mortgage contract early, if this is the case;(b) an explanation of whether early repayment charges are payable;(c) an explanation of when early repayment charges are payable;(d) an explanation of any

Where MCOB 5.6.84 R(1)(f) would result in more than three cash amounts being shown in the illustration, the cash amounts shown in the illustration may be restricted to three examples. These examples must be representative of the full range of charges that apply and not be limited to the lowest charges that apply. These three examples are in addition to:(1) any statement of the amount of any fees described in MCOB 5.6.84 R(1)(d); and(2) the maximum early repayment charge required

(1) In calculating example cash amounts in accordance with MCOB 5.6.84 R(1)(f), it must be assumed that:(a) the regulated mortgage contract is repaid in full;(b) unless the original amount borrowed is used, that all payments due on the regulated mortgage contract are actually paid;(c) additional fees and charges such as insurance premiums have been paid; and(d) no underpayments or overpayments have been made.(2) If:(a) cashbacks or other incentives need to be repaid; or(b) fees

Where the cash examples from MCOB 5.6.88 R included in the illustration would vary either if the interest rate charged on the regulated mortgage contract changed or with changes in interest rates generally, an appropriate warning that the early repayment charges may vary from the cash examples must be included in the illustration.

(1) Under the section heading 'What happens if you want to make overpayments?', the illustration must include details of any restrictions on lump sum and regular overpayments on the regulated mortgage contract, together with a statement as to whether or not the amount on which the interest charged is recalculated is reduced immediately on receipt of any lump sum or regular overpayment.(2) Where such recalculation does not take place immediately (for example, if an annual rest

Under the sub-heading 'Borrow back', the illustration must include details of circumstances in which the customer can borrow back any monies overpaid and a brief statement of any conditions that apply.

Under the sub-heading 'Incentives', the illustration must include:(1) any incentives including cashbacks; and(2) if a cashback is provided, the amount of the cashback and details of when it is paid to the customer.

Under the sub-heading 'Additional borrowing available without further approval', the illustration must provide details of circumstances in which there are any linked borrowing facilities that would allow the customer to increase the amount of the loan on which the illustration is based without any further approval from the mortgage lender (for example, if there are additional drawdown facilities).

Under the sub-heading 'Credit card', the illustration must:(1) state if a credit card is offered with the regulated mortgage contract; and(2) if a credit card is offered and it is a mortgage credit card:(a) unless (b) applies, include the following text:'This card will not give you a number of the statutory rights associated with traditional credit cards. Your mortgage offer will tell you more about the differences.'; or(b) where the mortgage lender provides the customer with

Where any of the additional features under MCOB 5.6.99 R to MCOB 5.6.102 R inclusive apply, then the following must also be stated if the amount of additional borrowing that would be available to the customer is stated in the illustration:(1) the maximum additional amount available;(2) if the interest rate payable on any additional borrowing is different to the interest rate in Section 4 and Section 6 of the illustration, the interest rate and the APR charged on the additional

(1) Where additional features are included in accordance with MCOB 5.6.92 R and these are credit facilities that do not meet the definition of a regulated mortgage contract, the relevant parts of Section 12 of the illustration must include the following text:'This additional feature is not regulated by the FSA'.1(2) Where additional features are included in accordance with MCOB 5.6.92 R and these are credit facilities regulated by the Consumer Credit Act 1974, the relevant parts

(1) Under the sub-heading 'Linked savings account', the illustration must include the following information:(a) whether a linked savings account is a compulsory or optional product (if the savings account is a compulsory product this must also be stated in Section 4 of the illustration in accordance with MCOB 5.6.25 R(6));(b) the interest rate paid on the linked savings account if it differs from the interest rate charged on the regulated mortgage contract; and(c) the firm providing

If an example is included in the illustration in accordance with MCOB 5.6.109 R(2) or MCOB 5.6.110 R(2), it must be based on information obtained from the customer and the amounts that are intended to be paid into the current or savings account on a regular basis; the amounts that it is intended are saved; and the actual or likely expenditure profile. The amounts involved and the expenditure profile should not be standard assumptions made by the firm, but should be those of the

Where the illustration is issued to a customer by, or on behalf of, a mortgage intermediary, Section 13 'Using a mortgage intermediary' must be included in the illustration and must include the following:(1) unless MCOB 5.6.114 R applies, a clear statement of the amount payable (either directly or indirectly) by the mortgage lender to the mortgage intermediary, or to any third parties; and(2) the name of the mortgage lender who will make the payment, the name of the mortgage intermediary

MCOB 2.3.7 R requires any material inducements provided by a mortgage lender, whether directly or indirectly, to a mortgage intermediary or third party (unless the payment only reflects the cost of outsourcing work relating to the processing of mortgage applications by a firm unconnected to the mortgage intermediary) to be quantified in cash terms, which will enable the cash values to be included in the illustration in accordance with MCOB 5.6.117 R.1

4(1) 4The following words must be prominently displayed in the illustration, after the contact details: 'Your home may be repossessed if you do not keep up repayments on your mortgage'.(2) If the loan may be secured on property which is not the customer's home the statement in (1) may be amended but only to the extent necessary in order to reflect that fact.4

(1) An amortisation table may be added to the end of the illustration after the information required by MCOB 5.6.124 R if the mortgage lender or mortgage intermediary wishes. A firm may find that this is particularly appropriate to illustrate certain types of regulated mortgage contract, for example, a regulated mortgage contract with more than one part.(2) The purpose of (1) is to permit a firm to add an amortisation table in accordance with the European Commission's 'Recommendation

If the customer's liability under a regulated mortgage contract is in a currency other than sterling, MCOB 5.6 applies to the illustration for that regulated mortgage contract with the following amendments:(1) all cash amounts must be given in the relevant currency except where otherwise required in (2)(a) and (3);(2) the following information must be stated under Section 4 'Description of this mortgage':(a) the amount in sterling on which the illustration is based from MCOB 5.6.6

If the interest rate charged on the regulated mortgage contract is deferred, MCOB 5.6 applies with the following additions:(1) A section headed: 'Effect of deferring interest on the amount you owe' must be included in the illustration after Section 6.(2) This section must be numbered 6a so that the numbering follows on consecutively from the preceding section unless MCOB 5.6.55 R applies in which case it should be numbered 6b.(3) Under the section heading the following text must

The heading for Section 6 of the illustration and the heading of the column on the right-hand side of this section must state the frequency with which payments must be made by the customer. (For example, if payments were to be made on a monthly basis, the heading for this section would be 'What you will need to pay each month' and the column would be headed 'Monthly payments'). Where no regular payments are required on the regulated mortgage contract, for example where all interest

All the payments in Section 6 of the illustration must be calculated based on the frequency used for the purposes of the headings in MCOB 5.6.40 R and must be shown in the column on the right-hand side of this section. If no payments are required, for example on a secured bridging loan or secured overdraft, then this column should be marked on the illustration as nil.

Section 6 of the illustration must contain the following information:(1) the loan amount on which the illustration is based. Where fees are being added to the loan then this figure should include all fees, charges and insurance premiums that have been added to the loan in accordance with MCOB 5.6.18 R(2) and MCOB 5.6.18 R(3), and the following text must follow the loan amount:'and include[s] the fees [and insurance premiums] that are shown in Section 8 [and Section 9] as being

The amount by which the total amount payable would increase in accordance with MCOB 5.6.140 R(1)(e) must be calculated as follows:(1) unless the total amount borrowed is used, it must be assumed that all payments due on the regulated mortgage contract have actually been paid, all additional fees and payments due have been paid, and no under or overpayments have been made;(2) unless the total amount borrowed is used, the calculation must be based on the amount of the loan outstanding

If, because of the assumed start date of the lifetime mortgage,7 the initial payment differs from the subsequent payments, the initial payment must be shown in this section in accordance with MCOB 9.4.39 R(3)(d).7

Unless all of the interest rates described in MCOB 9.4.47 R(4) apply for the life of the loan part to which they apply, then an additional sub section titled "What you will owe in future" must be included to indicate the future stepped payments. This section must:(1) state when a change in payment will occur;(2) state the reason for the change in payment; and(3) confirm that the payment illustrated assumes that interest rates will not change.

An explanation of the table required in accordance with MCOB 9.4.51 R must be shown in a box immediately under the heading using the following text:"This shows how the amount(s) paid to you and the interest and any fees that we charge mount up over [insert number of years estimated in accordance with MCOB 9.4.10 R or MCOB 9.4.12 R] years. It has been calculated using the current interest rate(s) of [insert interest rate(s)]. Interest is added to the amount you owe [insert frequency

Under the sub-heading 'Insurance you must take out through [insert name of mortgage lender or where relevant the name of the mortgage intermediary, or both]' the following information must be included if the lifetime mortgage7 requires the customer to take out insurance that is a tied product either through the mortgage lender or where relevant the mortgage intermediary:7(1) details of which insurance is a tied product;(2) for how long the customer is obliged to purchase the insurance;(3)

Under the heading "What happens if you do not want this mortgage any more?", the illustration must include the following information on the lifetime mortgage:77(1) under the sub-heading "Early repayment charges":(a) an explanation of whether early repayment charges are payable;(b) an explanation of when early repayment charges are payable;(c) an explanation of any other fees that are payable if the lifetime mortgage7 is repaid early, and the current level of these fees;7(d) a

Where MCOB 9.4.83 R(1)(e) would result in more than three cash amounts being shown in the illustration, the cash amounts shown in the illustration may be restricted to three examples. These three examples are in addition to the maximum early repayment charge required by MCOB 9.4.83 R(1)(f). These examples must be representative of the full range of charges that apply and not be limited to the lowest charges that apply. These three examples are in addition to:(1) any statement

(1) In calculating example cash amounts in accordance with MCOB 9.4.83 R(1)(e), it must be assumed that:(a) the lifetime mortgage7 is repaid in full;7(b) all payments due (if applicable) on the lifetime mortgage7 are actually paid;7(c) additional fees and charges such as insurance premiums have been paid; and(d) no underpayments or overpayments (if applicable) have been made.(2) If:(a) cashbacks or other incentives need to be repaid; or(b) fees need to be paid;the amounts that

Where the cash examples from MCOB 9.4.88 R included in the illustration would vary either if the interest rate charged on the lifetime mortgage7 changed or with changes in interest rates generally, an appropriate warning that the early repayment charges may vary from the cash examples must be included in the illustration.7

Where the early repayment charge could be higher than those stated in the illustration if the lifetime mortgage7 continued after the end of the term estimated in accordance with MCOB 9.4.10 R or MCOB 9.4.12 R, Section 13 of the illustration must include a clear statement to that effect.7

Under the section heading "Additional features" the illustration must include, where relevant, details of how the mortgage lender would treat any payments by the customer in excess of those required, and details of any additional features or facilities under the various sub-headings in MCOB 9.4.93 R.

(1) If none of the features at MCOB 9.4.93 R are applicable to the lifetime mortgage7 to which the illustration relates, the section headed 'Additional features' must be retained, but the sub-headings must not be included and a statement must be added to explain that there are no additional features.7(2) Only those features available on the lifetime mortgage7 need be included in the illustration.7(3) If a firm provides a customer with supplementary information about any additional

(1) Under the sub-heading 'Overpayments', the illustration must include details of any restrictions on lump sum and regular overpayments (if payments are required) on thelifetime mortgage,7 together with a statement as to whether or not the amount on which the interest is recalculated is reduced immediately on receipt of any lump sum or regular overpayment.7(2) Where such recalculation does not take place immediately (for example, if an annual rest method is used), this statement

Under the sub-heading "Borrow back", the illustration must include details of circumstances in which the customer can borrow back any monies overpaid and a brief statement of any conditions that apply.

Under the sub-heading "Additional borrowing available without further approval", the illustration must provide details of circumstances in which additional secured lending is offered with the lifetime mortgage7 that would allow the customer, subject to certain conditions, to increase the amount of the loan on which the illustration is based.7

Under the sub-heading "Additional secured borrowing", the illustration must provide details of circumstances in which additional secured lending is offered with the lifetime mortgage7 that would allow the customer, subject to certain conditions, to increase the amount of the loan on which the illustration is based.7

Under the sub-heading "Unsecured borrowing", the illustration must provide details of circumstances in which unsecured lending is offered with the lifetime mortgage7 that would allow the customer to increase the amount of the loan on which the illustration is based.7

Under the sub-heading "Credit card", the illustration must:(1) state whether a credit card is offered with thelifetime mortgage;7 and7(2) if a credit card is offered and it is a mortgage credit card:(a) unless (b) applies, include the following text:"This card will not give you a number of the statutory rights associated with traditional credit cards. Your lifetime mortgage offer will tell you more about the differences." or(b) where the mortgage lender provides the customer with

Where any of the additional features under MCOB 9.4.99 R to MCOB 9.4.102 R inclusive apply, then the following must also be stated if the amount of additional borrowing that would be available to the customer is stated in the illustration:(1) the maximum additional amount available;(2) if the interest rate payable on any additional borrowing is different to the interest rate in Section 5 and Section 8 of the illustration, the interest rate and the APR charged on the additional

Where more than one additional borrowing facility from MCOB 9.4.99 R to MCOB 9.4.102 R applies, the total debt and total payments due (if payments are required) under all these linked borrowing facilities must be included under a separate sub-section titled 'Total additional borrowing'.1

The purpose of MCOB 9.4.104 R is to show the total amount of any additional borrowing facilities that would be available to the customer and the cost of utilising these facilities. It must combine the amount available under any linked borrowing facilities including additional secured lending, credit cards and unsecured lending.

(1) Where additional features are included in accordance with MCOB 9.4.91 R and these are credit facilities that do not meet the definition of a regulated mortgage contract, the relevant parts of Section 14 of the illustration must include the following text:"This additional feature is not regulated by the FSA."1(2) Where additional features are included in accordance with MCOB 9.4.91 R and these are credit facilities regulated by the Consumer Credit Act 1974, the relevant parts

Under the sub-heading "Linked current account" the illustration must include the following information:(1) whether a linked current account is a compulsory or optional product (if the current account is a compulsory product this must also be stated in Section 5 of the illustration in accordance with MCOB 9.4.24 R(7));(2) an explanation of the interest rates that apply under different circumstances to the linked current account, if different from the interest rate charged on the

Under the sub-heading "Linked savings account" the illustration must include the following information:(1) whether a linked savings account is a compulsory or optional product (if the savings account is a compulsory product this must also be stated in Section 5 of the illustration in accordance with MCOB 9.4.24 R(7));(2) the interest rate paid on the linked savings account if it differs from the interest rate charged on thelifetime mortgage;7 and7(3) the firm providing the linked

Under the section heading "Overall cost of this mortgage":(1) the following text must be included in the illustration:"The APR helps you to compare lifetime mortgages by giving you one rate that shows the overall cost of the mortgage. It takes into account some fees and charges as well as the interest due, and this means that the APR may be higher than the interest rate shown in Sections 5 and 8. Only use the APR to compare lifetime mortgages of the same type, and where the same

MCOB 9.4.111 R(3) would require, for example, a reference to the fact that the overall cost takes into account mortgage payment protection insurance where this is required as a condition of the lifetime mortgage7 to which the illustration relates. The requirement to take out such insurance must be stated in Sections 5 and 12 of the illustration in accordance with MCOB 9.4.24 R(7), MCOB 9.4.72 R or MCOB 9.4.76 R.7

The following text must be included after the text required by MCOB 9.4.111 R with the relevant cost measures shown in the right-hand column of Section 15 in accordance with the layout shown in MCOB 9 Annex 1:(1) "The total amount you would pay back over the example term of [insert number of years in accordance with MCOB 9.4.10 R or MCOB 9.4.12 R] including the amount borrowed is £ [insert total amount payable]", and(2) "The overall cost for comparison is [insert the APR]% AP

Where the illustration is issued to a customer by, or on behalf of, a mortgage intermediary, Section 16 "Using a mortgage intermediary" must be included in the illustration and must include the following:(1) unless MCOB 9.4.120 R applies, a clear statement of the amount payable (either directly or indirectly) by the mortgage lender to the mortgage intermediary, or to any third parties; and(2) the name of the mortgage lender who will make the payment, the name of the mortgage intermediary

MCOB 2.3.7 R requires any material inducements provided by a mortgage lender, whether directly or indirectly, to a mortgage intermediary or third party (unless the payment only reflects the cost of outsourcing work relating to the processing of mortgage applications by a firm unconnected to the mortgage intermediary) to be quantified in cash terms, which will enable the cash values to be included in the illustration in accordance with MCOB 9.4.123 R.1

This section must:(1) follow Section 15 "Overall cost of this mortgage", unless the illustration is issued by a mortgage intermediary, in which case it must follow Section 16 "Using a mortgage intermediary"; and(2) include the name, address and contact point of the firm providing the illustration.

An example of wording which would comply with MCOB 9.4.126 R(2) would be:"If you wish to discuss this lifetime mortgage illustration please contact [name of individual] at [address] or on [telephone number]."

If the customer's liability under a lifetime mortgage7 is in a currency other than sterling, MCOB 9.4 applies to the illustration for that lifetime mortgage7 with the following modifications:77(1) all cash amounts must be given in the relevant currency except where otherwise required by (2)(a) and (3);(2) the following information must be stated under Section 5 "Description of this mortgage"(a) the amount in sterling on which the illustration is based from MCOB 9.4.13 R based

The text at MCOB 9.4.33 R(8) must be immediately followed by the following additional text, prominently displayed (for guidance on prominence see MCOB 2.2.9 G): "Changes in the exchange rate may increase the sterling equivalent of your debt."

If the lifetime mortgage7 is a shared appreciation mortgage, MCOB 9.4 applies to the illustration with the following modifications:7(1) Section 5 "Description of this mortgage" must contain the following additional information and text in this order after the details required by MCOB 9.4.24 R to MCOB 9.4.29 R:(a) "This lifetime mortgage involves [name of mortgage lender] taking a percentage share in any increase in the value of your property [insert details of all occasions when

The requirements at MCOB 9.4.130 R(1) must be immediately followed by the following additional text, prominently displayed (see MCOB 2.2.9 G):"You will need to pay this share in the value of your home to [name of mortgage lender] [insert time at which share must be paid - for example 'when your lifetime mortgage is repaid']. Think carefully about how this will affect the amount left over for you or your estate."

(1) 8Unless (2) applies, under the section heading "Which service are we providing you with?" the prescribed text in the home reversion planillustration under this heading must be included with a "check box" for each statement, one of which must be marked prominently to indicate the level of service provided to the customer;(2) If the level of service described in the illustration is provided by another firm, (1) may be replaced by the following: under the section heading "Which

(1) 8Under the section heading "What you have told us", the illustration must state the minimum information a firm must obtain from the customer (apart from details of the plan that the customer is interested in, which is in Section 5 of the illustration), and can include brief details of any other information that has been obtained from the customer and used to produce the illustration.(2) For an instalment reversion plan, where the customer requests an additional illustration

8At the end of Section 4 of the illustration a statement must be included making clear that changes to any of the information obtained from the customer, and where appropriate to the valuation of the property, could alter the details elsewhere in the illustration and encouraging the customer to ask for a revised illustration in this event.

8Under the section heading "Description of this home reversion plan" the illustration must:(1) state the name of the reversion provider providing the home reversion plan to which the illustration relates (a trading name used by the reversion provider may also be stated), and the name, if any, used to market the home reversion plan;(2) include a statement describing the home reversion plan;(3) if the home reversion plan is linked to an investment, and payments required from the

8Further information about the home reversion plan may be included as long as it does not significantly:(1) duplicate information contained elsewhere in the illustration; and(2) extend the length of this section.

8Under the section heading "Benefits", the illustration must include:(1) a description of the monetary amount(s), and in a box aligned to the right of the document, the monetary amount(s), that the customer will receive as a lump sum and/or as a regular payment;(2) if the home reversion plan is linked to an investment and the payments required from the customer on the home reversion plan will be deducted from the income from the investment, the monetary amount of the net income

8The illustration must include under the heading "Risks - important things you must consider" brief statements and warnings on all material risks involving a home reversion plan, including:(1) prominently at the beginning of the section: "A home reversion is a complex property transaction. You should seek legal advice to ensure that you fully understand all of the implications for you and your home and for anyone who might otherwise inherit the property.";(2) the effect of the

8Under the heading "Risks - important things you must consider" the illustration must also include the following if they apply:(1) for an instalment reversion plan, a statement that if the customer dies in the early years of the plan, income payments will cease and therefore the full expected benefits of the plan will not be obtained;(2) (a) for an instalment reversion plan where there is a regular cash sum payable; and(b) where:(i) the home reversion plan is linked to an investment;

8If the amount payable by the reversion provider to the reversion intermediary and to third parties is £250 or less, the reversion intermediary need only state that the amount of the payment is "no more than £250", unless the customer requests the actual amount.

8If the reversion intermediary will pass to the customer all or part of the amount payable to the reversion intermediary by the reversion provider, that fact may be stated in this section, along with the amount payable to the customer.

8The amount disclosed as payable to the reversion intermediary or third parties must include, but is not limited to:(1) any procuration fee; and(2) a cash value for any material non-cash inducements that the reversion provider provides, whether payable directly or indirectly.

A firm that enters into a lifetime mortgage1 with a customer where interest payments are required (whether or not they will be collected by deduction from the income from an annuity or other linked investment product) must provide the customer with the following information before the customer makes the first payment under the contract:1(1) the amount of the first payment required;(2) the amount of the subsequent payments;(3) the method by which the payments will be collected

A firm that enters into a lifetime mortgage1 which is a drawdown mortgage, with fixed payments to the customer, must provide the customer with the following information before the first payment is drawn down by the customer:1(1) the amount of the first payment to be made;(2) the amount of subsequent payments, if different; (3) the method by which the payment will be made (for example, by transfer to the customer's bank account) and the date of issue of the first and subsequent

Where the lifetime mortgage1 is a drawdown mortgage and the customer can choose the amount and frequency of the payments they receive, or the amount and frequency of payments can vary for other reasons (for example in line with interest rates) the firm must provide the customer with the following information before the first payment is drawn down by the customer:1(1) (a) where the customer can choose the amount and frequency of the payments they receive, details of any limitations

Where thelifetime mortgage1 provides for a lump sum payment to be made to the customer, and all or part of the interest will be rolled up during the life of the mortgage, the firm must provide the customer with the following information before the customer makes the first payment under the contract, or if no payments are required from the customer, within seven days of completion of the mortgage:1(1) if no payments are required from the customer, confirmation that no payments

(1) A firm must make and retain an adequate record of the information that it provides to each customer at the start of the lifetime mortgage1 in accordance with this section.1(2) The record required by (1) must be maintained for a year from the date that the information is provided to the customer.

A mortgage intermediary must take reasonable steps to ensure that an illustration which it issues, or which is issued on its behalf, other than that provided by a mortgage lender:(1) is accurate within the following tolerances:(a) no more than one percent or £1, whichever is the greater, below the actual figures charged by the mortgage lender for the following:(i) the total amount payable in Section 5 of the illustration;(ii) the amount payable for every £1 borrowed in Section

It is the responsibility of a mortgage intermediary to ensure compliance with MCOB 5.4.3 R. However, where a firm can show that it was reasonable for it to rely on information provided to it by another person, other than the mortgage lender, that an illustration was within the tolerances described in MCOB 5.4.3 R, he may be able to rely on MCOB 2.5.2 R, if this turns out not to be the case.

A firm must not issue an illustration to a customer for a regulated mortgage contract for which the customer is clearly ineligible on the basis of the information that the firm has obtained from the customer or the mortgage lender's lending criteria.

MCOB 5.4.13 R places no restrictions on the provision of information that is not specific to the amount the customer wants to borrow, for example, marketing literature including generic mortgage repayment tables or graphs illustrating the benefits of making a regular overpayment on a flexible mortgage. Such literature may, however, constitute a financial promotion2 and be subject to the provisions of MCOB 3 (Financial promotion).2

The record maintained in accordance with MCOB 5.4.19 R should contain or refer to matters such as:(1) the date on which the illustration was provided to the customer;(2) the date of the application made by the customer; and(3) details of the medium through which the illustration was provided.

To the extent practicable, a firm must effect appropriate registration or recording of legal title to a
safe custody asset2
in the name of:2(1) the client (or, where appropriate, the trustee firm), unless the client is an authorised person acting on behalf of its client, in which case it may be registered in the name of the client of that authorised person;(2) a nominee company which is controlled by:(a) the firm;(b) an affiliated company;(c) a recognised investment exchange

When a firm makes a voice telephony communication to a consumer, it must make its identity and the purpose of its call explicitly clear at the beginning of the conversation.[Note: article 3(3)(a) of the Distance Marketing Directive]

A firm must ensure that the information on contractual obligations to be communicated to a consumer during the pre-contractual phase is in conformity with the contractual obligations which would result from the law presumed to be applicable to the distance contract if that contract is concluded.[Note: article 3(4) of the Distance Marketing Directive]

A firm must communicate to the consumer all the contractual terms and conditions and the information referred to in the distance marketing disclosure rules in writing or another durable medium available and accessible to the consumer in good time before conclusion of any distance contract.[Note: article 5(1) of the Distance Marketing Directive]

(1) In the case of a voice telephony communication, and subject to the explicit consent of the consumer, only the abbreviated distance marketing information (ICOBS 3 Annex 3 R) needs to be provided during that communication.(2) However, unless another exemption applies (such as the exemption for means of distance communication not enabling disclosure) a firm must still provide the distance marketing information (ICOBS 3 Annex 2 R) in writing or another durable medium available

This section applies to a firm which produces, or arranges for the
production of, investment research that
is intended or likely to be subsequently disseminated to clients of
the firm or to the public, under
its own responsibility or that of a member of its group. [Note: article 25(1) of the MiFID
implementing Directive]

The concept of dissemination of investment research to clients or
to the public is not intended to include dissemination exclusively to persons within the group of
the firm. [Note: recital 33 of the MiFID
implementing Directive]

Persons whose
responsibilities or business interests may reasonably be considered to conflict
with the interests of the persons to
whom investment research is
disseminated include corporate finance personnel and persons involved
in sales and trading on behalf of clients or
the firm. [Note: recital 30 of the MiFID
implementing Directive]

Knowledge by a financial
analyst or other relevant person that
the firm intends to produce
or disseminate investment research to
its clients or to the public
(including in circumstances where research material has not yet been written)
could constitute knowledge of the likely timing and content of investment research under COBS 12.2.5 R (1).

A firm which
disseminates investment research produced
by another person to the public
or to clients is exempt from
complying with the requirements in COBS 12.2.3 R and COBS 12.2.5 R if
the following criteria are met:(1) the person that
produces the investment research is
not a member of the group to
which the firm belongs;(2) the firm does
not substantially alter the recommendations within the investment
research;(3) the firm does
not present the investment research as
having

The FSA considers that the significant
conflicts of interest which could arise are likely to mean it is inappropriate
for a financial analyst or
other relevant person to prepare investment research which is intended firstly
for internal use for the firm's
own advantage, and then for later publication to its clients (in
circumstances in which it might reasonably be expected to have a material
influence on its clients' investment
decisions).

(1) Subject to (2) and (3), this section applies to a firm in relation to:(a) the provision of information in relation to its designated investment business; and(b) the communication or approval of a financial promotion;where such information or financial promotion is addressed to, or disseminated in such a way that it is likely to be received by, a retail client.(2) This section does not apply in relation to a communication that is made by afirm in relation to its MiFID or equivalent

In deciding whether, and how, to communicate information to a particular target audience, a firm should take into account the nature of the product or business, the risks involved, the client's commitment, the likely information needs of the average recipient, and the role of the information in the sales process.

The statement required by MCOB 7.5.1 R must contain the following information:(1) except in the case of mortgage credit cards, information on the type oflifetime mortgage,3 (for example, fixed rate or variable rate) including a clear statement of how the firm expects the capital, or capital and interest (whichever is applicable) to be repaid (for example, from the proceeds of the sale of the property);3(2) details of the following transactions and information on the lifetime

Where a firm provides a customer with a statement containing the information set out in MCOB 9.8.1 R(2) more frequently than once a year, the information set out in MCOB 9.8.1 R(1), MCOB 9.8.1 R(3) and MCOB 9.8.1 R(4) may be provided in a separate communication, but must be provided at least once a year.

A firm must give the customer reasonable notice, in advance, of any of the following:(1) any changes to the payments that the customer is required to make (where payments are required, and whether or not they are collected by deduction from the income provided by a linked investment product such as annuity) resulting from interest rate changes;(2) the exercising of the firm's right (if allowed by the terms of the lifetime mortgage3 ) to enter the property to carry out essential

If a customer requests, or agrees to, a change to a lifetime mortgage3 (other than a change as described in MCOB 7.6.7 R to MCOB 7.6.27 R (as modified by MCOB 9)) that changes the amount of each payment due (where payments are required), a firm must provide the customer with the following information, in a single communication, before the change takes effect:3(1) the amount outstanding on the lifetime mortgage3 at the date the change is requested;3(2) the payment due and the frequency

If a customer requests, or agrees to, a change to a lifetime mortgage.3(other than a change as described in MCOB 7.6.7 R to MCOB 7.6.27 R (as modified by MCOB 9)) that changes the amount paid to the customer under a drawdown mortgage, or the amount that the customer will owe under a roll-up of interest mortgage, or both, a firm must provide the customer with the following information, in a single communication, before the change takes effect:3(1) the amount outstanding on the

1This chapter applies to a firm:(1) communicating with a client in relation to its designated investment business;(2) communicating or approving a financial promotion other than:(a) a financial promotion of qualifying credit, a home purchase plan or a home reversion plan; or(b) a financial promotion in respect of a non-investment insurance contract; or(c) a promotion of an unregulated collective investment scheme that would breach section 238(1) of the Act if made by an authorised

(1) A firm communicating with an eligible counterparty2 should have regard to the application of COBS to eligible counterparty business (COBS 1 Annex 1 Part 1).(2) This chapter does not apply in relation to communicating with an eligible counterparty other than the section on compensation information (see COBS 4.4) 2but elements of the requirements in PRIN may apply.

(1) In relation to communications by a firm to a client in relation to its designated investment business this chapter applies in accordance with the general application rule and the rule on business with UKclients from an overseas establishment (COBS 1 Annex 1 Part 2 paragraph 2.1R).(2) In addition, the financial promotion rules apply to a firm in relation to:(a) the communication of a financial promotion to a person inside the United Kingdom;(b) the communication of a cold call

(1) The EEA territorial scope rule modifies the general territorial scope of the rules in this chapter to the extent necessary to be compatible with European law. This means that in a number of cases, the rules in this chapter will apply to communications made by UK firms to persons located outside the United Kingdom and will not apply to communications made to persons inside the United Kingdom by EEA firms. Further guidance on this is located in COBS 1 Annex 1.(2) One effect

Firms should note the territorial scope of this chapter is also affected by:(1) the disapplication for financial promotions originating outside the United Kingdom that are not capable of having an effect within the United Kingdom (section 21(3) of the Act (Restrictions on financial promotion)) (see the defined term “excluded communication”);(2) the exemptions for overseas communicators (see the defined term “excluded communication”); and(3) the rules on financial promotions with

If a client has
notified a firm in writing that
he does not wish his money to
be held with a bank in the same group as
the firm, the firm must
either:(1) place
that client money in a client bank account with another bank in
accordance with CASS
5.5.38 R; or(2) return
that client money to, or pay
it to the order of, the client.

In the case of a client
bank account outside the United
Kingdom, if the bank does not provide the acknowledgement referred
to in CASS 5.5.49 R within 20 business days after
the firm dispatched the notice,
the firm must notify the client of this fact as set out in CASS 5.5.53 R.

A firm must
not hold, for a consumer5, client money in
a client bank account outside
the United Kingdom, unless
the firm has previously disclosed
to the consumer5 (whether in its terms of business, client
agreement8 or otherwise in writing):558(1) that
his money may be deposited in
a client bank account outside
the United Kingdom but that
the client may notify the firm that he does not wish his money to be held in a particular jurisdiction;(2) that
in such circumstances, the legal

If a client has
notified a firm in writing before
entering into a transaction that client money is
not to be held in a particular jurisdiction, the firm must
either:(1) hold
the client money in a client bank account in a jurisdiction to
which the client has not objected;
or(2) return
the client money to, or to the
order of, the client.

(1) If a firm considers, on the basis of the information received to enable it to assess appropriateness, that the product or service is not appropriate to the client, the firm must warn the client.(2) This warning may be provided in a standardised format. [Note: article 19(5) of MiFID]

(1) If the client elects not to provide the information to enable the firm to assess appropriateness, or if he provides insufficient information regarding his knowledge and experience, the firm must warn the client that such a decision will not allow the firm to determine whether the service or product envisaged is appropriate for him.(2) This warning may be provided in a standardised format. [Note: article 19(5) of MiFID]

Section 21(3) of the Act states that, in the case of a communication originating outside the United Kingdom, the restriction in section 21(1) applies only if it is capable of having an effect in the United Kingdom. In this respect, it is irrelevant whether the communication has an effect provided it is capable of doing so.

This appears to give a potentially broad jurisdictional scope to section 21. It seems clear that a communication which originates overseas will be capable of having an effect in the United Kingdom if it is an invitation or inducement to engage in investment activity which is communicated to a person in the United Kingdom. It would seem that communications made in other circumstances may also be capable of having an effect in the United Kingdom. However, the exemption for communications

Where communications by persons in another EEA State are made to or directed at persons in the United Kingdom account must be taken of the effect of any relevant EU Directives. For example, the E-Commerce Directive will, with limited exceptions, prevent the United Kingdom from imposing restrictions on incoming financial promotions in information society services. The Treasury has given effect to this through the Financial Promotion Order (see1PERG 8.12.38 G). Other potentially

(1) A mortgage lender or administrator1must make and retain an adequate record of its dealings with a customer whose account is in arrears or who has a sale shortfall1, which will enable the firm to show its compliance with this chapter1.111(2) A mortgage lender or administrator1must retain the record required by (1) for a yearfrom the date on which the relevant payment shortfall or sale shortfall1was cleared.1

The record referred to in MCOB 13.3.9 R should contain, or provide reference to, matters such as:(1) the date of first communication with the customer after the account was identified as being in arrears;(2) in relation to correspondence issued to a customer in arrears, the name and contact number of the employee dealing with that correspondence, where known;(3) the basis for issuing tailored information in accordance with MCOB 13.7.1 R;(4) information relating to any new payment

A service should be considered to be provided at the initiative of a client (see COBS 10.4.1 R (1)(a)1) unless the client demands it in response to a personalised communication from or on behalf of the firm to that particular client which contains an invitation or is intended to influence the client in respect of a specific financial instrument or specific transaction. [Note: recital 30 to MiFID]

(1) Communications to the world at large, such as those in newspapers or on billboards, are likely to be by their very nature general and therefore not personalised communications.(2) Communications addressed to a client (such as, for example, an email, a telephone call or a letter), may or may not be personalised depending on the content.(3) A communication is not personalised solely because it contains the name and address of the client or because a mailing list has been filtered.(4)

A firm must not, in any written or oral communication, seek to exclude or restrict, or to rely on any exclusion or restriction of, any duty or liability it may have to a customer under the regulatory system.

A firm must not, in any written or oral communication to a customer, seek to exclude or restrict, or to rely on any exclusion or restriction of, any duty or liability not referred to in MCOB 2.6.2 R unless it is reasonable for it to do so.

The words ‘personal visit, telephone conversation or other interactive dialogue’ clearly imply that the first two are types of the third. In the FSA's view, it is difficult to envisage circumstances in which a personal visit or telephone conversation would not be interactive. The very fact of a conversation taking place would mean two or more persons were interacting with each other. A telephone call is not the same thing as a conversation. It may be made to, or even by, an intelligent

An issue arises where a person (P), during the course of a presentation or meeting, invites or is asked to answer questions from the audience. P’s response may or may not be a real time communication. For example, the question may not be personal to the questioner and P may respond by addressing the audience in a way that precludes or does not call for any interaction. This will be a non-real time communication. On the other hand, the question may call for P to pursue a conversation

Article 8(3) of the Financial Promotion Order clarifies that a person will not have expressly requested a call, visit or dialogue merely:(1) because he does not indicate that he does not wish to receive any or any further visits or calls or to engage in any or any further dialogue; or(2) because he agrees to standard terms that state that such visits, calls or dialogue will take place, unless he has signified clearly that, in addition to agreeing to the terms, he is willing for

All information to be provided to a client in accordance with the rules in this chapter must be communicated:(1) in a durable medium available and accessible to the client;(2) in a clear and accurate manner, comprehensible to the client; and(3) in an official language of the State of the commitment or in any other language agreed by the parties. [Note: article 13(1) of the Insurance Mediation Directive]

In the case of telephone selling, the prior information given to a client must be in accordance with the distance marketing disclosure rules (COBS 5.1). Moreover, information must be provided to the client in accordance with the means of communication to clients rule (COBS 7.2.6 R) immediately after the conclusion of the life policy. [Note: article 13(3) of the Insurance Mediation Directive]

The information referred to in the means of communication to clients rule (COBS 7.2.6 R) may be provided orally where the client requests it, or where immediate cover is necessary. In those cases, the information must be provided to the client in accordance with that rule immediately after the conclusion of the life policy. [Note: article 13(2) of the Insurance Mediation Directive]